PureCycle Technologies, Inc.

NOTE 1 - ORGANIZATION

PureCycle Technologies, Inc. (together with its wholly-owned subsidiaries, "PCT" or the "Company") is a Florida-based corporation focused on commercializing a patented dissolution recycling technology for polypropylene that physically separates the polymer from other plastics, colors, odors and impurities (the “Technology”). The Technology was originally developed by The Procter & Gamble Company (“P&G”) and is designed to restore recycled polypropylene waste into like-new resin pellets, called PureFive® resin. PureFive® resin has similar properties and applicability for reuse as virgin polypropylene.

The process includes the following steps:

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Feed Pre-Processing (“Feed PreP”) collects, sorts, and prepares polypropylene waste (“feedstock”) for the dissolution recycling process ("Purification").

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Purification is a dissolution recycling process that uses a combination of solvent, temperature, and pressure to return the feedstock to near-virgin condition through a novel configuration of commercially-available equipment and unit operations. The Purification process puts the plastic through a physical extraction process using supercritical fluids that both extract and filter out other plastics and additives to purify the color, opacity and odor of the plastic without changing the bonds of the polymer. By not altering the chemical makeup of the polymer, the Company is able to use significantly less energy and reduce production costs as compared to virgin resin.

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Compounding, which involves blending the Company's resin with either virgin resin or additives, is a step that can be used on a case-by-case basis. Compounding allows for the modification of the resin to meet the end-user’s qualifications with melt flow, flexibility, clarity, color and strength being some of the properties that can be tailored through compounding.

Formation and Organization

PCT was formed as a Delaware limited liability company on September 15, 2015, as Advanced Resin Technologies, LLC. In November 2016, the Company changed its name from Advanced Resin Technologies, LLC to PureCycle Technologies LLC (“PCT LLC” and “Legacy PCT”).

Business Combination

On March 17, 2021, PCT consummated a business combination (“Business Combination”) by and among Roth CH Acquisition I Co., a Delaware corporation (“ROCH”), Roth CH Acquisition I Co. Parent Corp., a Delaware corporation and wholly-owned direct subsidiary of ROCH (“ParentCo”), Roth CH Merger Sub LLC, a Delaware limited liability company and wholly-owned direct subsidiary of Parent Co, Roth CH Merger Sub Corp., a Delaware corporation and wholly-owned direct subsidiary of ParentCo and PCT LLC pursuant to the Agreement and Plan of Merger dated as of November 16, 2020, as amended from time to time (the “Merger Agreement”).

Uponthe completion of the Business Combination and the other transactions contemplated by the Merger Agreement (the “Transactions”, and such completion, the “Closing”), ROCH changed its name to PureCycle Technologies Holdings Corp. and became a wholly-owned direct subsidiary of ParentCo, PCT LLC became a wholly-owned direct subsidiary of PureCycle Technologies Holdings Corp. and a wholly-owned indirect subsidiary of ParentCo, and ParentCo changed its name to PureCycle Technologies, Inc. The Company’s

Common Stock, par value $0.001 per share ("Common Stock"), units and public warrants are now listed on the Nasdaq Capital Market (“NASDAQ”) under the symbols “PCT,” “PCTTU” and “PCTTW,” respectively.

Legacy PCT unitholders will be issued up to 2.0 million additional shares of the Company’s Common Stock if certain conditions are met (the "Earnout”). The Legacy PCT unitholders will be entitled to 2.0 million shares upon the Ironton Facility becoming operational, as certified by Leidos Engineering, LLC (“Leidos”), an independent engineering firm, in accordance with criteria established in agreements in connection with construction of the plant.

Unless the context otherwise requires, the “Company,” and “PCT,” refer to PureCycle Technologies, Inc., and its subsidiaries at and after the Closing and give effect to the Closing. “Legacy PCT”, “ROCH” and “ParentCo” refer to PureCycle Technologies LLC, ROCH and ParentCo, respectively, prior to the Closing.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. The consolidated financial statements are presented in U.S. Dollars. Intercompany balances and transactions were eliminated upon consolidation. The accompanying consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, that are, in the opinion of management, necessary to present a fair statement of the results for the periods presented.

Reclassifications

Certain amounts in prior periods have been reclassified to conform with the current year presentation.

Cash and Cash Equivalents

The Company considers all highly-liquid investments with an original maturity of three months or less at date of inception to be cash and cash equivalents. As of December 31, 2025, the Company’s cash and cash equivalents balance represents cash and money market funds deposited with financial institutions, as well as U.S. treasuries with maturities of 90 days or less at acquisition. These balances may exceed federally insured limits; however, the Company believes the risk of loss is low. Actively traded money market funds are measured at their net asset value (“NAV”) and classified as Level 1 in the fair value hierarchy. The Company’s remaining cash equivalents are classified as Level 2 and measured at amortized cost, which is a reasonable estimate of fair value because of the short time between the purchase of the instrument and its expected realization.

Restricted Cash

Cash pledged as collateral for future capital purchases and leased properties is deemed restricted and included within this definition. Restricted cash that is expected to be spent or released from restriction within twelve months is classified as current on the Consolidated Balance Sheets. Restricted cash that is expected to be spent or released from restriction after twelve months is classified as noncurrent on the Consolidated Balance Sheets.

Investments

The Company's investment policy is established by the Chief Executive Officer and Chief Financial Officer and is reviewed as needed. The Company accounts for its investment in debt securities in accordance with Accounting Standards Codification ("ASC") 320, Investments – Debt Securities. Investmentsin debt securities are classified as available for sale and are reported at estimated fair value with unrealized gains and losses recorded in accumulated other comprehensive (loss)/income. The Company determines the appropriate classificationof its investment in debt securities at the time of purchase and re-evaluates such determination at each balance sheet date. The Company reviews its investments for impairment and adjusts these investments to fair value through earnings, as required.

Inventory

Production inventories are valued at the lower of cost or net realizable value and include raw materials, work-in-process, and finished goods inventory. The Company’s inventories are valued under the average cost method. As the Company has not generated material recurring sales and is in the early stages of operations, net realizable value is estimated based on anticipated selling prices.

The Company records spare parts for plant maintenance as a current asset and expenses when utilized. The Company has recorded $4.5 million and $3.5 million for spare parts within prepaid expenses and other current assets in the Consolidated Balance Sheets as of December 31, 2025 and 2024, respectively.

Property, Plant and Equipment

As of December 31, 2025 and 2024, the Company’s property, plant and equipment consists of building, land, office equipment and furniture, machinery and equipment, fixtures and furnishings and construction in progress. Substantially all property, plant and equipment are currently located within the United States of America ("U.S."). Property, plant and equipment are recorded at cost and are depreciated over their estimated useful lives, unless the useful life is indefinite, using the straight-line method over the following estimated useful lives:

Construction in progress relates to costs capitalized in conjunction with major improvements that have not yet been placed in service, and accordingly are not currently being depreciated. The Company capitalizes interest cost incurred on funds used to construct property, plant and equipment. In accordance with ASC 835, Interest, the Company capitalizes all interest incurred on tax-exempt project indebtedness. The capitalized interest is recorded as part of the asset to which it relates over the asset’s estimated useful life.

The Company evaluates the recoverability of long-lived assets when events and circumstances indicate that the assets may be impaired and the undiscounted net cash flows estimated to be generated by those assets are less than their carrying value. If the net carrying value exceeds the fair value, an impairment loss exists and is calculated as the amount by which the carrying amount of a long-lived asset exceeds its fair value.

Leases

The Company determines whether a contract contains a lease at inception based on whether the Company has the right to control the use of an identified asset during the contract term. Leases are classified as either operating or financing. For operating leases, the Company recognizes a right-of-use (“ROU”) asset and a corresponding lease liability at the commencement date, measured at the present value of remaining lease payments. Because the implicit rate is generally not determinable, the Company uses its incremental borrowing rate to determine the present value of lease payments. Operating lease expense is recognized on a straight-line basis over the lease term.

Finance leases result in recognition of an ROU asset that is depreciated over the lease term and interest expense on the related lease liability. Finance lease assets are included in property, plant and equipment in the Consolidated Balance Sheets and depreciation expense is included in cost of operations in the Consolidated Statements of Comprehensive Loss.

ROU assets are evaluated for impairment when indicators are present. The Company has elected not to recognize ROU assets or lease liabilities for leases with terms of 12 months or less; lease expense for these arrangements is recognized on a straight-line basis.

Certain leases include variable payments, such as reimbursements for real estate taxes, insurance, and common-area maintenance. The Company has elected to account for lease and non-lease components as a single lease component, and variable non-lease components are recognized as incurred.

Debt and Debt Issuance Costs

Debt is initially recorded at fair value, which normally reflects the proceeds received, net of any discounts or debt issuance costs. Debt is subsequently stated at amortized cost. Debt issuance costs, discounts and premiums are generally amortized to interest expense using the straight-line method, which approximates the effective interest method, over the term of the debt. Debt issuance costs related to a recognized debt liability are presented in the Consolidated Balance Sheets as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. Debt issuance costs for revolving credit facilities are deferred and recorded as an asset, which is amortized on a straight-line basis over the term of the agreement.

Revenue Recognition

The Company’s revenue is primarily generated from the sale of recycled and compounded polypropylene resin pellets or co-products to customers. Those sales predominantly contain a single performance obligation and revenue is recognized at the point in time when control of the product is transferred to customers, along with the title, risk of loss and rewards of ownership. Depending on the arrangement with the customer, these criteria are met either at the time the product is shipped or when the product is made available or delivered to the destination specified in the agreement with the customer. Sales revenue is recognized in an amount that reflects the consideration the Company expects to be entitled to in exchange for that finished product. Amounts billed to customers related to freight are included in revenues and freight costs are included in cost of operations in the accompanying Consolidated Statements of Comprehensive Loss. Standard payment terms are 30 days from the date of shipment, unless otherwise negotiated with the customer.

The Company records trade receivables at the amount billed to customers, net of any allowance for expected credit losses. Based on the Company's evaluation of potential credit losses, no allowance for expected credit losses were recorded as of December 31, 2025.

Two customers generated 68% of the Company's revenues during the year ended December 31, 2025, and comprised 81% of the Company's accounts receivable as of December 31, 2025.

Cost of Operations

Operating costs are expensed as incurred. Operating costs consist ofpersonnel costs (including wages, salaries and benefits) and other costs directly related to operations at the Company's operating facilities, including feedstock, rent, depreciation, repairs and maintenance, utilities and supplies.

Research and Development Costs

Research and development costs are expensed as incurred. Research and development expenses consist of third-party consulting costs, and payroll and benefits of those employees engaged in research, design and development activities, costs related to design tools, license expenses related to intellectual property, depreciation for long-lived assets, and supplies and services.

Selling, General, and Administrative Expenses

Selling, general and administrative expenses are expensed as incurred. Selling, general, and administrative expenses consist of personnel-related expenses for the Company's corporate, executive, finance, and other administrative functions and professional services, including legal, audit and accounting services.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year. In addition, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for tax loss and credit carryforwards. Significant judgment is required in determining the current provision for income taxes and deferred tax assets or liabilities. A valuation allowance is recorded to reduce deferred tax assets to an amount for which realization is more likely than not.

The assumptions, judgments and estimates relative to the current provision for income taxes take into account the Company’s interpretation and application of current tax laws and possible outcomes of current and future examinations conducted by domestic and foreign tax authorities. As needed, reserves for income taxes are recorded to address potential exposures involving tax positions that could be challenged by tax authorities. The Company regularly assesses the likelihood of outcomes resulting from these examinations to determine the adequacy of the provision for income taxes and associated reserves. Interest and penalties related to unrecognized tax benefits are recorded in income tax provision/(benefit).

Net Loss Per Share

The Company follows the two-class method when computing net loss per common share when shares are issued that meet the definition of participating securities. The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. The two-class method also requires losses for the period to be allocated between common and participating securities based on their respective rights if the participating security contractually participates in losses. As holders of participating securities do not have a contractual obligation to fund losses, undistributed net losses are not allocated to nonvested restricted stock for purposes of the loss per share calculation.

The dilutive effect for the Company's Green Convertible Notes (as defined below) and Series B Convertible Perpetual Preferred stock is calculated using the "if-converted" method. The dilutive effect of all other instruments is calculated using the treasury stock method.

Equity-Based Compensation

The Company grants equity-based compensation to select employees. The equity-based compensation cost for the incentive shares is measured at the grant date based on the fair value of the award and recognized on a straight-line basis over the requisite service period, which is the vesting period. The Company evaluates modifications in accordance with ASC 718, Compensation – Stock Compensation. The Company accounts for forfeitures as they occur for its equity-based awards.

Warrants

The Company evaluates all of its financial instruments, including issued warrants, to determine if such instruments are liability classified, pursuant to ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) or derivatives or contain features that qualify as embedded derivatives pursuant to ASC 815, Derivatives and Hedging (“ASC 815”). The classification of instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period.

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the related disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses for the period presented. Although these estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future, actual results may be different from these estimates.

Segment Information

Under ASC 280, Segment Reporting, operating segments are defined as components of an enterprise where discrete financial information is available that is evaluated regularly by the chief operating decision maker ("CODM"), in deciding how to allocate resources and in assessing performance. Therefore, the Company's Chief Executive Officer, who is also the CODM, makes decisions and manages the Company's operations as asingle operating segment, which encompasses integrated business activities related to the recycling of polypropylene into resin pellets. To date, the Company has limited operations and measures performance on a consolidated basis. Management has determined that the measure of segment performance determined most in accordance with U.S. GAAP is consolidated net income or loss, as applicable. The Company’s Consolidated Statements of Comprehensive Loss include the significant expense categories provided to the CODM on a consolidated basis, and the CODM does not review significant classifications of expenses outside of those shown on the Consolidated Statements of Comprehensive Loss. The CODM primarily reviews certain operating key performance indicators for evaluating performance and allocating resources.

Fair Value of Financial Instruments

The Company applies fair value accounting in accordance with ASC 820, Fair Value Measurements (“ASC 820”) for valuation of financial instruments. ASC 820 defines fair value and establishes a framework for measuring fair value and making disclosures about fair value measurements. This framework applies to all financial assets and liabilities that are being measured and reported at fair value and for disclosures of fair value.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and sets out a fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Inputs are broadly defined as assumptions market participants would use in pricing an asset or liability. Assets and liabilities carried at fair value are classified and disclosed in one of the following three categories:

Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 - Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly, and fair value is determined through the use of models or other valuation methodologies.

Level 3 - Inputs are unobservable for the asset or liability and include situations where there is little, if any, market activity for the asset or liability. The inputs into the determination of fair value are based upon the best information in the circumstances and may require significant management judgment or estimation.

Recently Adopted Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) 2023-09 -Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures. The amendments in this update address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information and includes certain other amendments to improve the effectiveness of income tax disclosures. The updated standard is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company adopted this guidance for the annual period ending December 31, 2025, using the retrospective approach. The enhanced disclosures can be found in Note 12 -Income Taxes.

Recently Issued Accounting Pronouncements

In December 2025, the FASB issued ASU No. 2025-12, Codification Improvements to address suggestions received from stakeholders on the Accounting Standards Codification (the "Codification") and to make other incremental improvements to U.S. GAAP. The update represents changes to the Codification that clarify, correct errors in or make other improvements to a variety of topics that are intended to make it easier to understand and apply. The amendments to this update are effective for fiscal years beginning after December 15, 2026 and interim periods within those annual reporting periods. The Company is currently evaluating the impact that the updated standard will have on its financial statements.

In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow - Scope Improvements. The update provides clarifications intended to improve the consistency and usability of interim disclosure requirements, including a comprehensive listing of required interim disclosures and a new disclosure principle for reporting material events occurring after the most recent annual period. The amendments do not change the underlying objectives of interim reporting but are designed to enhance clarity in application. The amendments to this update are effective for fiscal years beginning after December 15, 2027 and interim periods within those annual reporting periods. The Company is currently evaluating the impact that the updated standard will have on its financial statements.

In December 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. The amendments in this update establish the accounting for a government grant received by a business entity, including guidance for (1) a grant related to an asset and (2) a grant related to income. A grant related to an asset is a government grant, or part of a government grant, that is conditioned on the purchase, construction, or acquisition of an asset (for example, a long-lived asset or inventory). A grant related to income is a government grant, or part of a government grant, other than a grant related to an asset (for example, a grant that reimburses a business entity for operating expenses). The amendments in this update require that a government grant received by a business entity should not be recognized until it is probable that (a) a business entity will comply with the conditions attached to the grant and (b) the grant will be received, and the business entity meets the recognition guidance for a grant related to

an asset or a grant related to income. The amendments to this update are effective for fiscal years beginning after December 15, 2028 and interim periods within those reporting periods. The Company is currently evaluating the impact that the updated standard will have on its financial statements.

In September 2025, the FASB issued ASU 2025-06 - Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The amendment simplifies the capitalization guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods. The amendments to this update are effective for annual reporting periods beginning after December 15, 2027, and interim periods within those annual reporting periods. Early adoption of this update is permitted. The Company does not expect this guidance to have a material impact on its financial statements and disclosures.

In November 2024, the FASB issued ASU No. 2024-04 –Debt – Debt with Conversion and Other Options: Induced Conversions of Convertible Debt Instruments, which improves the relevance and consistency in application of the induced conversion guidance in Subtopic 470-20, Debt-Debt with Conversion and Other Options. Specifically, the guidance is intended to clarify how to determine whether a settlement of convertible debt (particularly cash convertible instruments) at terms that differ from the original conversion terms should be accounted for under the induced conversion or extinguishment guidance. The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company will adopt this guidance for its fiscal year commencing January 1, 2026 for any debt conversions, as they occur. Accordingly, there is no impact to the financial statements or disclosures for the years presented.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Disaggregation Disclosures. In January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. This guidance requires more detailed disclosure about the types of expenses presented within the expense captions of the financial statements. Specifically, disclosure of purchases of inventory, employee compensation, depreciation, and intangible asset amortization are required on both an interim and annual basis. In addition, a qualitative description of remaining amounts in relevant expense captions that have not separately been disaggregated will be required on an interim and annual basis. On an annual basis, disclosure of an entity’s definition of selling expenses and the amount of selling expenses is required. The amendments to this update are effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption of this update is permitted. The Company is currently evaluating the impact that the updated standard will have on its financial statements.

There have been no other recent accounting pronouncements, changes in accounting pronouncements or recently adopted accounting guidance during fiscal 2025 that are of significance or potential significance to the Company.

NOTE 3 - LIQUIDITY AND GOING CONCERN

The Company has determined that the going concern conclusion as disclosed in its previous filings is no longer applicable for at least the twelve-month period from the issuance date of these financial statements. The Company previously disclosed there were conditions that raised substantial doubt about the Company's ability to continue as a going concern within one year after the date that the financial statements were issued. Those conditions were alleviated by management’s plans, as outlined in previous filings.

The improvement in the Company's financial condition is primarily attributable to the Company raising proceeds from the sale of the Series B Convertible Perpetual Preferred Stock, as described below and in more detail in Note 14 -Mezzanine Equity and Stockholders' Equity.

In June 2025, the Company entered into binding subscription agreements with certain investors, including related parties, to which the Company sold to the investors, in a private placement transaction, an aggregate of 300,000 shares of the Company’s Series B Convertible Perpetual Preferred Stock, par value $0.001 per share, at an initial issue price of $1,000 per share. The gross proceeds to the Company from these subscription agreements were approximately $300.0 million before deducting fees and expenses.

This development has led management to conclude that the previous substantial doubt about the Company's ability to continue as a going concern for a twelve-month period following the date that these financial statements were available to be issued is no longer present. The Company's current financial projections support the Company's ability to meet its obligations as they become due for at least one year from the issuance of these financial statements. The Company’s ability to continue as a going concern longer term is dependent on continued improvement in operations at the Company's first commercial-scale recycling facility in Lawrence County, Ohio (the "Ironton Facility"), the commercialization of its PureFive® resin product, and the successful construction and sale of product from its future Augusta, Thailand and Belgium Facilities. Management continues to evaluate different strategies and may pursue additional actions to further increase its liquidity position.

NOTE 4 - RELATED PARTY TRANSACTIONS

The Company identifies and discloses transactions with related parties in accordance with ASC 850, Related Party Disclosures. The Company's related party transactions are primarily related to financing activities.

The Company’s consolidated financial statements reflect transactions with certain principal owners of PCT and their affiliates, including Sylebra Capital Management (“Sylebra”), Samlyn Capital, LLC (“Samlyn”), Pure Plastic LLC (“Pure Plastic”), and Pure Crown LLC ("Pure Crown"). The Company's consolidated financial statements also reflect transactions with companies affiliated with PCT, including Glockner Family Venture Fund LP, Glockner Enterprises, and Glockner Oil (collectively, "Glockner"), as well as Milliken & Company ("Milliken").

PCT purchased $0.8 million, $0.6 million and $0.5 million of certain chemicals used in its Purification process from Milliken during the years ended December 31, 2025, 2024 and 2023, respectively.

PCT currently has a $200.0 million Revolving Credit Facility (the "Revolving Credit Facility") pursuant to a credit agreement with Sylebra. On May 28, 2025, the Company borrowed $10.0 million from the Revolving Credit Facility. Borrowings under the Revolving Credit Facility accrued interest at a rate of 21.8%. The Company repaid the $10.0 million in borrowings plus accrued interest of $0.2 million on June 20, 2025. PCT is required to pay a commitment fee equal to 0.25% per annum based on the actual daily unused amount of the Revolving Credit Facility, payable quarterly. During both of the years ended December 31, 2025 and 2024, the Company paid $0.5 million in commitment fees to Sylebra on the unused borrowing capacity. On November 4, 2025, the Company entered into the Tenth Amendment to the Revolving Credit Agreement, which extended the maturity date of the Revolving Credit Facility from September 30, 2026 to September 30, 2027 and added a clause regarding the potential redemption of the Series A Preferred Stock whereby if, on or prior to March 17, 2026, sufficient proceeds are received from the exercise of Series A Warrants and the Company's Board of Directors (the "Board") approves, then the Company shall redeem in full the Series A Preferred Stock. The Company incurred $1.0 million in fees for this amendment. Refer to Note 10 -Long-Term Debt and Bonds Payable for further information.

During June 2025, the Company executed a 30-day promissory note with Pure Plastic for $4.9 million at a rate of 1.0% interest per month. The promissory note was repaid on June 20, 2025, along with accrued interest in the amount of $0.02 million.

During the year ended December 31, 2025, the Company sold $22.8 million in aggregate par amount of Series A Bonds owned by PCT LLC to related parties at a price of $880 per $1,000 principal amount under a bond purchase agreement for gross proceeds of$20.1 million. Refer to Note 10 -Long-Term Debt and Bonds Payable for further information.

During June 2025, the Company entered into binding subscription agreements with certain investors, including investment entities affiliated with Sylebra, Samlyn, and Pure Crown, pursuant to which the Company agreed to sell, in a private placement transaction, shares of the Company’s Series B Convertible Perpetual Preferred Stock, as further described in Note 14 -Mezzanine Equity and Stockholders' Equity.

During September 2025, the Company issued 4,003 shares of its Series A Preferred Stock (as defined below) for in-kind payment of dividends on the instruments,2,001 of which were issued to Sylebra, and 2,002 were issued to Samlyn.

On July 28, 2025, Glockner, a related party of the Company, exercised 0.1 million of their outstanding Series A Warrants. The Company received $1.2 million in cash and issued 0.1 million shares of the Company's Common Stock to Glockner.

The table below summarizes the related party balances and transactions reflected in the consolidated financial statements as of December 31, 2025 and 2024:

NOTE 5 - AVAILABLE-FOR-SALE INVESTMENTS

As of December 31, 2025, the Company classified its investments in debt securities as available-for-sale. Debt securities available-for-sale were comprised of highly-liquid investments with minimum “A” rated securities and, as of December 31, 2025, consisted of corporate entity debt securities. The debt securities are reported at fair value with unrealized gains or losses recorded in accumulated other comprehensive income in the Consolidated Statements of Comprehensive Loss.

The Company didnot have any available-for-sale investments at December 31, 2024. The following table represents the Company’s available-for-sale investments due within one year by major security type as of December 31, 2025:

The Company reviews available-for-sale investments for impairment loss periodically. During the years ended December 31, 2025 and 2024, the Company didnot recognize any impairment losses. The fair value for fixed-rate debt securities is based on quoted market prices for the same or similar debt instruments and is classified as Level 2 in the fair value hierarchy. Refer to Note 17 - Fair Value of Financial Instruments for further information.

NOTE 6 - INVENTORY

The Company's inventory is comprised of the following:

NOTE 7 – PROPERTY, PLANT AND EQUIPMENT

Presented in the table below are the major classes of property, plant and equipment by category as of the below dates:

Depreciation expense is recorded in the Consolidated Statements of Comprehensive Loss as follows:

In connection with our intent to construct new polypropylene recycling facilities in Thailand and Belgium, and a recent redesign of the planned Purification facility at our Augusta, Georgia location, management has evaluated certain equipment that was previously purchased for the Augusta Facility (and recorded as construction in progress) for future usefulness in any of these aforementioned facilities. This evaluation resulted in the Company recording a non-cash write-down charge on these assets of $15.1 million during the year ended December 31, 2025, which is reco rded in write-down of long-lead equipment in the Consolidated Statements of Comprehensive Loss. As the Company continues to develop the design plans for our Planned Facilities, there potentially could be additional write-downs as final evaluations are made as to what purchased equipment will or will not be used in construction of these facilities.

NOTE 8 – DEVELOPMENT PARTNER ARRANGEMENTS

License Agreements

On October 16, 2015, Legacy PCT entered into a patent license agreement with P&G (the “Original Patent License Agreement”). This agreement was subsequently replaced by an Amended and Restated Patent License Agreement dated July 28, 2020, and further modified by a Side Letter Agreement dated February 12, 2021 (collectively, the “License Agreement”).

The License Agreement outlines three phases, with specific deliverables for each phase. During Phase 1 of the agreement, P&G provides up toone full-time employee to assist in the execution of Legacy PCT’s research and development activities, and Phase 2 increases this totwo full-time employees. Phase 3 covers the commercial manufacturing phase of the licensed product, including construction of the first commercial facility, production capacity targets, and pricing terms with P&G and third parties. In April 2019, Legacy PCT elected to enter into Phase 3 of the agreement and prepaid a royalty payment in the amount of $2.0 million, which will be reduced against future royalties payable, as sales occur. Where the Company has made royalty payments to its product development partners, the Company expenses such payments as incurred unless it has determined that it is probable that such prepaid royalties have future economic benefit. In such cases, prepaid royalties will be reduced as the royalties would have been due to the partners. As of December 31, 2025 and 2024,$2.0 million is recorded in each period for the royalties in prepaid expenses and other current assets in the Consolidated Balance Sheets.

On November 13, 2019, Legacy PCT entered into a patent sublicense agreement with Impact Recycling Limited through the term of the patents. The agreement outlines an initial license fee of $2.5 million and royalties on production using the license. The initial license fee of $2.5 million is recorded in prepaid expenses and other noncurrent assets in the Consolidated Balance Sheets. In May 2021, the Company began using the technology covered by the agreement and commenced straight-line amortization of the fee, which will be fully amortized on May 31, 2036.

Effective February 21, 2025, PCT LLC and P&G executed an amendment to the License Agreement, which, among other terms, permanently waives the exclusivity license clawback provisions for facilities located in North America and extends the exclusivity provisions for facilities outside North America.

Block and Release Agreement

On June 23, 2020, Legacy PCT entered into a block and release agreement with Total Petrochemicals & Refining S.A./N.V. (“Total”). Upon execution of the agreement, Total made a prepayment of $5.0 million for future receipt of resin consisting of recycled polypropylene. The $5.0 million prepayment is recorded as deferred revenue in the Consolidated Balance Sheets. The deferred revenue remains noncurrent provided the Company complies with certain provisions contained in the agreement.

NOTE 9 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

The Company's accrued expenses and other current liabilities are comprised of the following:

NOTE 10 –LONG-TERM DEBT AND BONDS PAYABLE

The Company’s debt balances, including related party debt, consist of the following at December 31, 2025 and 2024:

Green Convertible Notes

On August 24, 2023, the Company completed the private offering of $250.0 million in aggregate principal amount of 7.25%Green Convertible Senior Notes (the “Green Convertible Notes”) with a maturity of August 15, 2030. Interest is payable semi-annually in arrears on February 15 and August 15 of each year, and commenced on February 13, 2024. Each $1,000 principal amount of the Green Convertible Notes was issued at a price of $900. An amount equal to the difference between the issue price and the principal amount will accrete from the original issue date through August 15, 2027. The Notes are senior unsecured obligations of the Company. Entities affiliated with a greater than 5% beneficial owner of the Company purchased $50.0 million aggregate principal amount of the Green Convertible Notes.

In connection with the issuance of the Green Convertible Notes, the Company entered into an Indenture, dated August 24, 2023 (the “Indenture”), with U.S. Bank Trust Company, National Association, as trustee. The Indenture includes customary covenants and events of default, after which the Green Convertible Notes may be declared immediately due and payable.

Holders of the Green Convertible Notes may convert their notes at any time prior to the maturity date. The Company may choose to settle conversions in cash, shares of its Common Stock, or a combination of both. The initial conversion rate is 67.4764 shares of its Common Stock per $1,000 principal amount (equivalent to approximately$14.82 per share of its Common Stock). The conversion rate is subject to adjustment for certain events, and in specified circumstances before August 15, 2027, the Company may increase the conversion rate for holders who convert in connection with such events.

Holders of the Green Convertible Notes may require the Company to repurchase their notes on August 15, 2027 for cash at 100% of the principal amount at maturity, plus accrued and unpaid interest.

In addition, if the Company undergoes a fundamental change (as defined in the Indenture), holders of the Green Convertible Notes may require the Company to repurchase their notes at a cash repurchase price equal to 100% of the accreted principal amount of the notes, plus accrued and unpaid interest.

The Company may redeem the Green Convertible Notes on or after August 20, 2025 for cash at 100% of the accreted principal amount, plus accrued and unpaid interest, if certain stock-price conditions are met. No sinking fund is provided for the Green Convertible Notes. The fair value of the Green Convertible Notes is classified within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs. Refer to Note 17 -Fair Value of Financial Instruments for further information.

The net proceeds from the Green Convertible Notes, excluding any offering expenses, were approximately $218.5 million, after deducting the initial purchaser’s discounts and fees paid to the Company's financial advisor. The Company allocated a portion of the net proceeds to the financing and refinancing of recently completed and future Eligible Green Projects in the U.S. “Eligible Green Projects” means: investments in (i) acquisitions of buildings; (ii) building developments or redevelopments; (iii) renovations in existing buildings; and (iv) tenant improvement projects, in each case, that have received, or are expected to receive, in the three years prior to the issuance of the notes or during the term of the notes, a Leadership in Energy and Environmental Design ("LEED") Silver, Gold or Platinum certification (or environmentally equivalent successor standards). Prior to issuing the Green Convertible Notes and as part of its overall business plan, the Company has focused on the value of the sustainability opportunities PureFive™ resin offers to support expanding a circular economy. To pursue those opportunities, the Company purchased equipment and commissioned design services for PreP facilities that will enable the Company to advance circular economy adapted products, production technologies and processes, and/or research and development related to recycling waste polypropylene. The Company believes those legacy purchases and designs should complement the Company’s Eligible Green Projects development.

In June 2025, the Company announced its intent to re-direct and re-purpose certain previously purchased long-lead equipment to its Belgium Facility or Thailand Facility. The Company also announced its intent to design a larger-capacity facility, the first of which is to be constructed and installed at the Augusta Facility. The Company has already allocated $56.0 million toward certain PreP equipment and a research and development lab, and will use additional funds, significantly in excess of the remaining unallocated proceeds from the Green Convertible Notes, to continue engineering design work and to purchase additional long-lead items for the Augusta Facility. Pending such allocation, the Company intends to use the remaining net proceeds for general corporate purposes.

The following provides a summary of the interest expense of the Company's Green Convertible Notes:

The following provides a summary of balances related to the Company's Green Convertible Notes included in the Consolidated Balance Sheets:

Revenue Bonds

In October 2020, the Southern Ohio Port Authority (“SOPA”) issued Revenue Bonds (as defined below) pursuant to an Indenture of Trust (as amended, restated, supplemented or otherwise modified from time to time, the “Indenture of Trust”), between SOPA and UMB Bank, N.A., as trustee, and loaned the proceeds from the Revenue Bond sale to PureCycle: Ohio LLC (“PCO”), an Ohio limited liability company and indirect wholly-owned subsidiary of the Company, pursuant to a Loan Agreement dated as of October 1, 2020, between SOPA and PCO (as amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”). The proceeds are to be used, among other things, to acquire, construct and equip a portion of the Ironton Facility. Capitalized terms used but not defined have the meanings as defined in the Indenture of Trust or the Loan Agreement.

The Revenue Bonds were offered in three series (collectively referred to as “the Bonds” or the “Revenue Bonds”):

(A) Exempt Facility Revenue Bonds (PureCycle Project), Tax-Exempt Series 2020A (“Series 2020A Bonds” or "Senior Bonds");

(B) Subordinate Exempt Facility Revenue Bonds (PureCycle Project), Tax-Exempt Series 2020B (“Series 2020B Bonds”); and

(C) Subordinate Exempt Facility Revenue Bonds (PureCycle Project), Taxable Series 2020C (“Series 2020C Bonds”).

On March 5, 2024, (the “Closing Date”), PCO and the Holders (as defined in the Indenture) of a majority in the aggregate principal amount of the Series 2020A Bonds outstanding (the "Majority Holders") closed on the Purchase Agreement and Consent (“Purchase Agreement”). The Purchase Agreement was executed by each Holder that elected to sell its Bonds (each, a “Seller” and collectively, “Sellers”). The Sellers received a price equal to $1,050 per $1,000 principal amount of the Bonds held, which amount was calculated in part to compensate the Sellers for default interest accruing from January 2, 2023 through December 31, 2023, as well as other accrued and unpaid interest as consideration for consent to the Third Supplemental Indenture, by and among SOPA, PCO, the Guarantor (as defined in the Indenture), PCTO Holdco LLC ("PCTO Holdco") and the Trustee (as defined in the Indenture) (the “Third Supplemental Indenture”). The Third Supplemental Indenture amended and supplemented the Indenture and certain of the other Financing Documents (as defined by the

Indenture) by eliminating substantially all covenants and events of default contained in the Indenture ("Events of Default”), the Loan Agreement and certain of such other Financing Documents.

In March 2024, PCT LLC, a subsidiary of the Company, purchased 99% of the outstanding Revenue Bonds with $74.5 million of unrestricted cash and $184.6 million of restricted cash. The purchase was determined to be an extinguishment of the underlying debt obligation due to PCO being a wholly-owned subsidiary of the Purchaser. As of December 31, 2025, there were$75.6 million of outstanding Bonds that PCT intends to, and has the ability to, re-market based on the need for additional liquidity. Of the $259.1 million paid for the purchase, $5.9 million represented payment of accrued and unpaid interest prior to the Closing Date and $253.2 million was allocated to the outstanding carrying value at the Closing Date of $232.0 million. As a result, a $21.2 million loss on extinguishment of the Bonds was recognized in the Consolidated Statements of Comprehensive Loss for the year ended December 31, 2024.

On March 25, 2024, the Fourth Supplemental Indenture was executed, which instructed the Trustee to release$22.1 million from the Bonds Debt Service Reserve Fund and $3.3 million from the Repair and Replacement Fund to PCO.

On June 14, 2024, the Fifth Supplemental Indenture was executed, which amended certain provisions of the Indenture, including redefining Majority Holders to be the Holders of seventy-five percent (75%) in aggregate principal amount of the Senior Bonds then outstanding, or if no Senior Bonds are then outstanding, the Holders of seventy-five percent (75%) in aggregate principal amount of Bonds then outstanding.

On August 7, 2024, PCT LLC, Pure Plastic, and several other parties reached agreement on terms whereby certain investors purchased approximately $22.5 million in aggregate par amount of Series A Bonds owned by PCT LLC at a price of $800 per $1,000 principal amount, with $12.5 million being sold to Pure Plastic and $10.0 million being sold to other parties.

On October 25, 2024, the Sixth Supplemental Indenture was executed, which amended certain provisions of the Indenture and Loan Agreements to include, among other things, certain financial covenants. The amendments were a requirement of the August 7, 2024 bond purchase documentation.

On December 26, 2025, the Seventh Supplemental Indenture was executed, which amended the definition of “Outside Completion Date” to mean December 31, 2029, and redefined “Majority Holders” to be the Holders of not less than a majority in aggregate principal amount of the Senior Bonds then outstanding, or, if no Senior Bonds are then outstanding, the Holders of a majority in aggregate principal amount of Bonds then outstanding.

During the year ended December 31, 2025, the Company sold $19.1 million in aggregate principal amount of its Senior Bonds to certain investors at a price of $880 per $1,000 principal amount for gross proceeds of $16.8 million.

The Revenue Bonds are recorded within long-term debt (current and noncurrent) and related party bonds payable (current and noncurrent) in the Consolidated Balance Sheets. The Company incurred$2.2 million, $13.9 million and $19.3 million of third party contractual interest cost during the years ended December 31, 2025, 2024, and 2023, respectively. The amount of third party contractual interest for the year ended December 31, 2024 includes $4.1 million of unamortized deferred financing costs and original issue discount that was written off as a loss on extinguishment of debt. As the Revenue Bond proceeds were used to construct the Company’s property, plant and equipment, the interest costs related to the tax-exempt portion of the Revenue Bonds have been capitalized within Property, Plant and Equipment. There wasno interest cost capitalized during the years ended December 31, 2025 and 2024. There was $7.1 million interest cost capitalized during the year ended December 31,2023.

The following provides a summary of the Company's Revenue Bonds:

Revenue Bonds Sold to Related Parties

On May 7, 2024, PCT LLC and Pure Plastic executed a bond purchase agreement (as subsequently amended and restated to reflect the appropriate denomination of bonds, the “Amended and Restated Bond Purchase Agreement”), whereby Pure Plastic purchased approximately $94.3 million in aggregate par amount of Bonds owned by PCT LLC (the “Related Party Bonds”), including (i) a portion of the Series 2020A Bonds, (ii) all of the Series 2020B Bonds, and (iii) all of the Series 2020C Bonds, at a price of $800 per $1,000 principal amount of the Related Party Bonds. Affiliates of Pure Plastic are greater than 5% beneficial owners of the Company.

A portion of $75.4 million proceeds from the Revenue Bonds were used to terminate the Company’s obligation under the $40.0 million Term Loan Facility (as defined below) and a Payoff and Release Letter (the “Payoff and Release Letter”) was executed on May 10, 2024. The Company was also required to pay a 12% prepayment premium on the outstanding principal and interest paid in order to prepay the Term Loan Facility (the “Prepayment Premium”), plus certain expenses. The Company issued warrants (“Series B Warrants”) to Pure Plastic pursuant to the Series B Warrant Agreement to satisfy the Prepayment Premium (the “Series B Warrant Agreement”). Refer to Note 16 -Warrants for further discussion.

The issuance of the Related Party Bonds and retirement of the Term Loan Facility with Pure Plastic, discussed below, was accounted for as a debt modification. The principal issued for the Related Party Bonds amounted to $94.3 million, with $29.8 million of discount and $1.5 million of issuance costs recorded as a reduction of the debt carrying value on the date of the transaction (including retention of $1.5 million of discount and $1.5 million of issuance costs remaining on the Term Loan Facility as of the transaction date, as well as a discount of $6.8 million related to the value of the Series B Warrants issued in satisfaction of the Prepayment Premium). The carrying value of the Related Party Bonds is recorded within related party bonds payable (current and noncurrent) in the Consolidated Balance Sheets.

During the year ended December 31, 2025, the Company sold $22.8 million in aggregate principal amount of its Senior Bonds to related parties at a price of $880 per $1,000 principal amount for gross proceeds of $20.1 million.

The Company incurred contractual interest on related party bonds of $16.3 million and $13.0 million for the years ended December 31, 2025 and 2024, respectively. There wereno related party bonds at December 31,2023.

CSC Equipment Financing

On May 8, 2023, the Company, through PureCycle PreP LLC, an indirect wholly-owned subsidiary of the Company, entered into a Master Lease Agreement (the “Master Lease Agreement”) with CSC Leasing Co. (“CSC”). CSC funded$20.3 million for purposes of procuring equipment. During October 2025, the Company paid off the entire outstanding balance of $20.3 million owed to CSC pursuant to the Master Lease Agreement, wrote-offthe unamortized debt issuance costs of $0.1 million and recorded a loss on extinguishment of approximately $4.4 million.

Varilease Finance, Inc.

PCT entered into an equipment financing arrangement with Varilease Finance, Inc. pursuant to a master lease agreement dated June 24, 2024, and received progress funding of $7.6 million in 2024. The Company began making interest only payments in September 2024 and continued to do so until the related equipment was placed in service and principal payments began in January 2025.

Sylebra Credit Facility

PCT has a $200.0 million revolving credit facility (the "Revolving Credit Facility")pursuant to a credit agreement (the “Revolving Credit Agreement”) dated as of March 15, 2023 and amended from time to time, with PureCycle Technologies Holdings Corp., PCT LLC and the PureCycle Augusta, LLC (collectively, the "Guarantors"), Sylebra Capital Partners Master Fund, LTD, Sylebra Capital Parc Master Fund, and Sylebra Capital Menlo Master Fund (collectively, the “Lenders”), and Madison Pacific Trust Limited (the “Administrative Agent” and “Security Agent”). The Lenders and their affiliates are greater than 5% beneficial owners of PCT. The Revolving Credit Facility matures on September 30, 2027.

Amounts outstanding under the Revolving Credit Agreement bear interest at a variable annual rate equal to Term SOFR (as defined in the Revolving Credit Agreement) in effect for such period plus 17.50%. PCT is also required to pay a commitment fee equal to 0.25% per annum based on the actual daily unused amount of the Revolving Credit Facility, payable quarterly. Subject to prior written notice and payment of breakage fees, if any, PCT may (i) terminate all or any portion of the commitments under the Revolving Credit Agreement, and/or (ii) prepay all or any portion of any outstanding borrowings.

The Revolving Credit Agreement contains representations, covenants and events of default that are customary for financing transactions of this nature.

Amounts outstanding under the Revolving Credit Agreement are guaranteed by the Guarantors, and are secured by a security interest in substantially all of the assets of PCT. Any majority-owned direct or indirect subsidiaries of PCT are required to guaranty the obligations under the Revolving Credit Agreement and grant security interests in substantially all of their respective assets (subject to certain exceptions).

On February 5, 2025, in conjunction with a private placement offering of the Company's Common Stock, the Company, the Guarantors, the Administrative Agent, the Security Agent and the Lenders executed a Limited Consent and Seventh Amendment to the Credit Agreement to, among other things, permit the offering and the transactions contemplated thereby. The lenders and their affiliates are greater than 5% beneficial owners of the Company.

On April 11, 2025, the Company entered into the Eighth Amendment to the Revolving Credit Agreement, which extended the maturity date of the Revolving Credit Facility from March 31, 2026 to September 30, 2026.

On June 16, 2025, in conjunction with a private placement offering of the Company's Series B Convertible Perpetual Preferred Stock, the Company, the Guarantors, the Administrative Agent, the Security Agent and the Lenders executed a Ninth Amendment to the Credit Agreement to, among other things, (i) permit the offering of the Company's Series B Convertible Perpetual Preferred Stock, and (ii) amend the indebtedness covenant to add a basket for unsecured indebtedness of the Company in an aggregate principal amount not to exceed $50.0 million.

During May 2025, the Company drew a total of $10.0 million on the Revolving Credit Facility, which was repaid during June 2025 using the funds received on the Series B Preferred Convertible Perpetual Preferred Stock, as described in more detail in Note 14 -Mezzanine Equity and Stockholders' Equity.

On November 4, 2025, the Company entered into the Tenth Amendment to the Revolving Credit Agreement, which extended the maturity date of the Revolving Credit Facility from September 30, 2026 to September 30, 2027 and added a clause regarding the potential redemption of Series A Preferred Stock whereby if, on or prior to March 17, 2026, sufficient proceeds are received from the exercise of Series A Warrants and the Board approves, then the Company shall redeem in full the Series A Preferred Stock.

The Company paid issuance costs totaling $2.1 million for amendments to the Revolving Credit Agreement during the year ended December 31, 2025.

There wereno funds drawn on the Revolving Credit Facility as of December 31, 2025 and 2024, respectively. The up-front commitment fee and other related fees are being amortized over the term of the contract.

The Pure Plastic Term Loan Facility

On May 8, 2023, the Company entered into a $40.0 million Term Loan Facility pursuant to the Term Loan Credit Agreement dated as of May 8, 2023, among the Company, the Guarantors party thereto and Pure Plastic LLC (as Lender, Administrative Agent, and Security Agent), which would have matured on December 31, 2025 (the “Term Loan Facility”). Affiliates of the lender to the Term Loan Facility are greater than 5% beneficial owners of the Company.

On May 10, 2024, Pure Plastic executed the Payoff and Release Letter of the Term Loan Facility, the Term Loan Facility was terminated and the obligations were paid in full.

Principal repayments due on long-term debt and related party bonds payable over the next five years are as follows (in thousands):

NOTE 11 - LEASES

The Company leases real estate, equipment, and vehicles. The Company’s most significant individual lease arrangements relate to real estate with lease terms ranging from 1 to 30 years. Lease terms include renewal or termination options the Company is reasonably certain to exercise.

In May 2024, the Company sublet the leased space that previously housed its corporate headquarters in Orlando, FL and has no further involvement in that property. The Company recognized a $0.8 million impairmenton the related ROU asset, which is recorded in other (income)/expense, net in the Consolidated Statements of Comprehensive Loss.

The components of lease expense and supplemental cash flow information related to leases for the period are as follows:

The weighted-average remaining lease term and weighted-average discount rate for our operating lease liabilities as of December 31, 2025 were 14.1 years and 6.5%, respectively.

The supplemental balance sheet information related to leases for the period is as follows:

Maturities of the Company’s lease liabilities are as follows (in thousands):

Sale-leaseback Transaction

The Company is party to a sale-leaseback arrangement with The Development Authority of Augusta, Georgia (“AEDA”) related to the Augusta Facility. The improvements and equipment, when completed and placed in service, will be transferred to the AEDA and leased back by PCT. The arrangement has an initial expiration date in 2044 and continues to provide local property tax incentives to the Company.

NOTE 12 - INCOME TAXES

Loss from continuing operations before income taxes, classified by source of income, were as follows:

The components of the provision/(benefit) for income taxes were as follows:

The effective tax rate differs from the statutory tax rates as follows:

Deferred income tax assets and liabilities result primarily from temporary differences in the recognition of differences between the tax basis and financial statement basis of assets and liabilities, as well as from the recognition of the tax benefits of net operating loss carryforwards and other attributes.

The components of the deferred income tax assets and liabilities were as follows:

As of December 31, 2025, the Company has $800.8 million of U.S. federal net operating loss carryforwards, $24.2 million post-apportioned state net operating loss carryforwards, and $34.1 million of research and development tax credit carryforwards. As of December 31, 2024, the Company had $542.7 million of U.S. federal net operating loss carryforwards, $15.0 million post-apportioned gross state net operating loss carryforwards, and $34.1 million of research and development tax credit carryforwards. The attributes will be available to offset future income tax liabilities. The U.S. federal net operating losses can be carried forward indefinitely, the state net operating losses in certain jurisdictions can be carried forward indefinitely, while certain other jurisdictions expire at various dates, and the research and development tax credit can be carried forward for up to 20 years and will begin to expire in 2042.

Valuation allowances are established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. The valuation allowance on our deferred tax assets was $214.6 million and $155.5 million as of December 31, 2025 and 2024, respectively, resulting in a net change of $59.1 million year-over-year. The valuation allowance mainly relates to U.S. federal and state net operating loss carryforwards, credit carryforwards, and start-up expenses. As the Company has reported minimal revenue from inception, it has no historic basis for projecting future taxable income, and lacks other sources of taxable income, resulting in the continued need for a valuation allowance.

As of December 31, 2025, the Company has continued to report foreign losses, which resulted in unbenefited accumulated losses for foreign operations. As a result, there is no potential deferred tax liability on the outside basis of foreign investments as of December 31, 2025 and 2024, respectively.

As of December 31, 2025 and 2024, the Company hasnot recorded an amount of gross unrecognized tax benefits for uncertain tax positions for the current or prior year planned tax filing positions. No unrecognized tax benefits are applicable for prior periods.

The Company files income tax returns in the U.S. federal jurisdiction and in various state jurisdictions based on existing tax laws. The Company remains generally subject to potential examination in the U.S. and state jurisdictions for years beginning on or after March 2021 due to the creation of net operating losses that can be used in the future. Any potential reviews for years prior to March 2021 would not be expected to impact the Company while the Company operated as a flow-through entity. The Company is not currently under audit in any jurisdiction for income taxes.

The Company actively monitors domestic and global tax law changes to account for the effects in the period the legislation is enacted, as applicable.

NOTE 13 – COMMITMENTS AND CONTINGENCIES

Financial Assurance

The Company holds a surety bond in the amount of$8.0 million as of December 31, 2025 to provide financial assurance related to its performance under a certain vendor contract, which expires at the earlier of satisfaction of the obligation, termination of the related vendor contract, or December 31, 2026 (subject to renewal within one year).

Legal Proceedings

The Company is subject to legal and regulatory actions that arise from time to time in the ordinary course of business. The assessment as to whether a loss is probable or reasonably possible, and as to whether such loss or a range of such losses is estimable, often involves significant judgment about future events, and the outcome of litigation is inherently uncertain. Other than as described below, there is no material pending or threatened litigation against the Company that remains outstanding as of December 31, 2025.

Denham-Blythe Arbitration

On October 7, 2020, PCO, a wholly-owned subsidiary of the Company, and Denham-Blythe Company, Inc. (“DB”) executed an Engineering, Procurement, and Construction Agreement for certain construction activities associated with the Ironton Facility.

On June 16, 2023, following unsuccessful efforts at mediating various disputes over certain unapproved change orders and payment applications, DB filed a demand for binding arbitration (“Arbitration Demand”) with the American Arbitration Association (“AAA”), seeking approximately $17.0 million plus attorney's fees and cost of the arbitration related to certain fee applications, change orders and amounts currently held in retainage by PCO, and, on June 21, 2023, filed a mechanics lien in Lawrence County, Ohio for the same sum.

On August 30, 2023, DB filed a breach of contract claim against PCO and others in Lawrence County Ohio, alleging the same facts contained in its Arbitration Demand, as well as an action to foreclose on a lien filed in Lawrence County, Ohio. Concurrently, DB requested the complaint be stayed pending the resolution of all issues in the arbitration.

On November 25, 2025, the Company received notice from the AAA arbitration panel of its decision awarding DB approximately $15.0 million of its $17.0 million demand. The AAA arbitration panel also awarded DB interest and attorneys’ fees, subject to submission of documentation to the arbitration panel. The Company disagrees with the findings and conclusions of the AAA arbitration panel and is evaluating whether to appeal the final award. As a result of the AAA arbitration panel decision, in 2025, the Company has accrued an additional $12.2 million to the fees already accrued under the terms of the DB contract, which includes $4.0 million as an increase to construction in progress, $3.6 million in selling, general, and administrative expenses for legal fees, and $4.5 million for prejudgment interest under the terms of the contract, which is recorded in other (income)/expense in the Consolidated Statements of Comprehensive Loss. As of December 31, 2025, the Company has a total of $23.1 million accrued for the DB contract, which is recorded in accrued expenses and other current liabilities in the Consolidated Balance Sheets.

Winter Garden Lease Dispute

On November 20, 2024, the Company filed a complaint for declaratory relief in the Circuit Court for Orange County, Florida against Crown Industrial Partners, LLC (“Crown”), Case No. 2024-CA-010359, seeking the Court determine that Crown breached theeleven-year lease agreement for a planned PreP facility in Winter Garden, Florida (“Lease”) by failing to repair, replace, and restore the utility and sewer lines for the property subject to the Lease and by hindering the Company’s performance under the Lease; that the frustration of purpose doctrine excuses the Company’s performance; and that the Lease is terminated or that the Company is entitled to receive an abatement of rent due to the lack of tenantability of the leased premises. On August 6, 2025, Crown filed an Answer and Counterclaim in which it seeks a declaration from the Court that the Company is in breach because the Lease imposes on the Company the responsibility to obtain and maintain certain utility services. Crown is seeking actual and consequential damages for the Company’s alleged breach of failing to obtain certain utility services, including, but not limited to, diminution of value of the property, cost associated with providing water and wastewater service to the Property, reimbursement of tenant improvements paid by Crown for the Company’s occupancy, contractual indemnity for and all other damages caused by the Company’s alleged breach, plus rent due under the Lease and costs of reletting the property if the Company is forced to vacate prior to the Lease term, as well as costs and attorney’s fees. Discovery is ongoing in the matter. The Company believes that it is not possible at this time to reasonably assess the outcome of this matter or to estimate the loss or range of losses, if any, as the matter is in early stages.

Other Matters

In the future, PCT may become party to additional legal matters and claims arising in the ordinary course of business. While PCT is unable to predict the outcome of the above or future matters, it does not believe, based upon currently available facts, that the ultimate resolution of any such pending matters will have a material adverse effect on its overall financial position, results of operations, or cash flows.

NOTE 14 - MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY

Mezzanine Equity

Series B Convertible Perpetual Preferred Stock

On June 16, 2025, the Company entered into binding subscription agreements (the "Series B Subscription Agreements") with certain investors (collectively, the “Series B Investors”), including investment entities affiliated with Pure Crown, Sylebra, Daniel Gibson, and Samlyn, pursuant to which the Company agreed to sell to the Series B Investors, in a private placement transaction (the “Series B Offering”), an aggregate of 300,000 shares of Series B Convertible Perpetual Preferred Stock at an initial issue price of $1,000 per share. The transactions contemplated by the Series B Subscription Agreements closed on June 20, 2025 (the "Series B Closing Date"). The gross proceeds to the Company were $300.0 million before deducting placement agent fees and other estimated offering expenses.

In accordance with ASC 480, Distinguishing Liabilities from Equity, the Company has classified the Series B Convertible Perpetual Preferred Stock in temporary (mezzanine) equity because the Company can be forced into a cash redemption scenario upon events not within its control pursuant to a change in control redemption provision. The Company initially measured the Series B Convertible Perpetual Preferred Stock at the amount of total proceeds less offering costs. Because the Series B Convertible Perpetual Preferred Stock is neither currently redeemable nor probable of becoming redeemable in the future, no subsequent measurement is required at this time. The Company will continue to monitor the probability of the Series B Convertible Perpetual Preferred Stock becoming redeemable at each reporting period.

The Series B Convertible Perpetual Preferred Stock was issued pursuant to a Series B Certificate of Designations filed with the Secretary of State of the State of Delaware, establishing the preferences, limitations and relative rights of the Series B Convertible Perpetual Preferred Stock. The Series B Certificate of Designations amended the Company’s Certificate of Incorporation and was effective immediately on filing.

The Series B Convertible Perpetual Preferred Stock ranks, with respect to dividend rights and rights upon any liquidation, dissolution or winding up of the Company (a “Liquidation Event”): (a) senior to the Company’s Common Stock and other capital stock of the Company, the terms of which do not expressly provide that such class or series ranks senior to or on a parity with the Series B Convertible Perpetual Preferred Stock other than the Company’s Series A Preferred Stock, as to divided rights and rights upon Liquidation Events; (b) on a parity with any other class or series of capital stock of the Company, the terms of which expressly provide that such class or series ranks on a parity with the Series B Convertible Perpetual Preferred Stock as to dividend rights and rights upon Liquidation Events; (c) junior to the Series A Preferred Stock and any other class or series of capital stock of the Company, the terms of which expressly provide that such class or series ranks senior to the Series B Convertible Perpetual Preferred Stock as to dividend rights and rights upon Liquidation Events; and (d) junior to all existing and future indebtedness of the Company.

A holder of the Series B Convertible Perpetual Preferred Stock may elect to convert their holdings into shares of the Company's Common Stock at any time. In addition, on or after the dividend payment date following the fourth anniversary of the Series B Closing Date, if at any time the closing price of the Company's Common Stock has been at least 175% of the applicable conversion price for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading days ending on the trading day immediately preceding the trading day on which a conversion notice is given (a “Series B Conversion Notice”), the Company may elect to convert all of the Series B Convertible Perpetual Preferred Stock into a number of shares of the Company's Common Stock equal to the Series B Accrued Value (as defined below) divided by the conversion price on the date of the Series B Conversion Notice, unless modified pursuant to a Make-Whole Change (as defined below). The Series B Convertible Perpetual Preferred Stock is convertible into the Company's Common Stock at an initial conversion price equal to $14.02, which represents a 30% premium to the 10-day volume weighted average price of the Company's Common Stock on the trading day immediately prior to the execution of the Series B Subscription Agreements.

If requisite stockholder approval is required for certain conversions, then until such approval is obtained, no shares of the Company's Common Stock will be issued or delivered upon conversion of Series B Convertible Perpetual Preferred Stock if doing so would cause the holder (or any related person/group) to own more than 19.99% of the outstanding voting stock.

Except as may be expressly required by the Delaware General Corporation Law, holders of the Series B Convertible Perpetual Preferred Stock are not entitled to any voting rights.

Holders of the Series B Convertible Perpetual Preferred Stock are entitled to receive cumulative dividends at a rate equal to 7% per annum, payable in kind or in cash at the Company’s option, which dividends, if paid in kind, will be capitalized to the Series B Accrued Value. During the year ended December 31, 2025, there were $11.3 million of in-kind dividends accrued on the Series B Convertible Perpetual Preferred stock, which increased the outstanding Series B Perpetual Convertible Preferred Stock value.

In the event of any Liquidation Event, each holder of the Series B Convertible Perpetual Preferred Stock will be entitled to receive a per share amount equal to the greater of (i) the per share purchase price of the Series B Convertible Perpetual Preferred Stock (as adjusted for any in-kind dividends paid thereon) plus all accrued and unpaid dividends thereon (the “Series B Accrued Value”) and (ii) the amount that such Series B Convertible Perpetual Preferred Stock would have been entitled to receive if they had converted into the Company's Common Stock immediately prior to such Liquidation Event.

The Company may not take any of the following actions unless otherwise approved by the holders of a majority of the then-outstanding Series B Convertible Perpetual Preferred Stock: (a) amend or waive any provision in the Certificate of Incorporation in any way that materially, adversely and disproportionately affects the rights, preferences, and privileges or power of the Series B Convertible Perpetual Preferred Stock; (b) increase the authorized number of shares of Series A Preferred Stock unless such increase is required pursuant to the existing terms of the Certificate of Designations of Series A Preferred Stock, as modified by the waivers entered into by all of the holders of the Series A Preferred Stock on September 17, 2024; (c) other than in connection with the Series A Preferred Stock, issue any equity securities of the Company containing rights, preferences or privileges with respect to distributions or liquidation superior to or on parity with the Series B Convertible Perpetual Preferred Stock; or (d) repurchase or redeem any of the Company's issued and outstanding Common Stock other than any such repurchases or redemptions (i) undertaken in connection with any equity incentive agreements approved by the Board, (ii) undertaken to satisfy obligations of the Company existing on the date of the Certificate of Designations, or (iii) that do not result in payments by the Company in an aggregate amount, together with all prior payments made pursuant to this clause (iii), in excess of $50.0 million.

Except in the case of a change in control, the Series B Convertible Perpetual Preferred Stock may not be redeemed or repurchased upon the election of the holders of the Series B Convertible Perpetual Preferred Stock.

Upon certain change in control events involving the Company, (i) the holders of the Series B Convertible Perpetual Preferred Stock will have the right to require the Company to redeem any or all of their Series B Convertible Perpetual Preferred Stock and (ii) the Company will have the option to redeem all (but not less than all) of the then-outstanding Series B Convertible Perpetual Preferred Stock, in each case, for a cash amount equal to the Series B Accrued Value, on a per share basis. In connection with the Company delivering a Series B Conversion Notice or in connection with a change in control, the Company will, in certain circumstances, be required to increase the conversion rate for shares of Series B Convertible Perpetual Preferred Stock converting in connection therewith (a “Make-Whole Change”). Such Make-Whole Change will be calculated using a make-whole table calculated over a 10-year period. In no event will the conversion rate be increased to an amount that exceeds 87.5611 shares of Common Stock per $1,000 liquidation preference of Series B Preferred Stock.

In conjunction with the Series B Offering, the Company entered into the Ninth Amendment to the Company's Revolving Credit Facility, to, among other things, (i) permit the Series B Offering, and (ii) amend the indebtedness covenant to add a basket for unsecured indebtedness of the Company in an aggregate principal amount not to exceed $50.0 million.

Stockholders' Equity

Preferred Transactions

On September 11, 2024, the Company entered into subscription agreements (the “Series A Subscription Agreements”) with certain investors (the “Series A Investors”), including affiliates of Sylebra and Samlyn, both related parties, pursuant to which the Company agreed to sell to the Series A Investors, in a private placement, an aggregate of (i)50,000 shares of the Company’s Series A Preferred Stock, par value $0.001 per share (“Series A Preferred Stock”), sold at an initial issue price of $1,000 per share, (ii)8,528,786 shares of the Company's Common Stock, sold at a price of $4.69 per share (the “Common Stock Price”), and (iii) Series C Warrants to purchase an aggregate of 5,000,000 shares of the Company's Common Stock at a price of $11.50 per share of Common Stock (the “Series C Warrants”, and the shares of Common Stock issuable upon exercise of the Series C Warrants, the “Warrant Shares”). The transactions contemplated by the Series A Subscription Agreements closed on September 13, 2024. The gross proceeds to the Company were approximately $90.0 million before deducting fees and other estimated offering expenses, which were immaterial. Proceeds were first allocated to liability instruments based on fair value, then allocated pro-rata to the equity instruments. Refer to Note 16 -Warrants for further information on the Series C Warrants.

Series A Preferred Stock

The shares of Series A Preferred Stock were issued pursuant to a Certificate of Designations (the “Series A Certificate of Designations”) filed on September 13, 2024, as amended on September 17, 2024 (as described below), and rank senior to the Company's Common Stock with respect to the payment of dividends and distributions upon liquidation, dissolution or winding-up. Holders of the Series A Preferred Stock are entitled to receive dividend payments at a return equal to 8% per annum, payable in cash or in kind at the election of the Company. During September 2025, the Company issued 4,003 shares of its Series A Preferred Stock for in-kind payment of dividends on the instruments. As of December 31, 2025 and 2024, there were 100,000 shares of Series A Preferred Stock authorized, and there were 54,003 and 50,000 shares issued and outstanding, respectively.

Holders of the Series A Preferred Stock do not have voting rights. The Series A Preferred Stock is not convertible, nor are there any sinking-fund requirements. The Series A Preferred Stock is redeemable at the Company’s option or mandatorily on September 13, 2027. The Company accounts for the Series A Preferred Stock as a liability in accordance with ASC 480, Distinguishing Liabilities from Equity. The Series A Preferred Stock is measured at the present value of the amount to be paid at settlement, accruing interest cost using the rate implicit at inception. As of December 31, 2025 and 2024, the Series A Preferred Stock Liability was $29.6 million and $18.4 million, respectively. During the years ended December 31, 2025 and 2024, the Company recognized$11.2 million and$2.1 million, respectively, of interest expense (which includes amortization of original issuance discount) on the Series A Preferred Stock.

The holders of the Series A Preferred Stock have a contingent put right (the “Put Option”), which was bifurcated and recognized separately at fair value through earnings pursuant to ASC 815-15, Embedded Derivatives. The Put Option is contingent upon the Company incurring any indebtedness after the initial issue date that is senior to the Series A Preferred Stock and/or secured by the assets of PureCycle Augusta, LLC. As of December 31, 2025 the Put Option liability hasno ascribed fair value and as of December 31,2024, the Put Option liability had a fair value of $3.4 million. During the year ended December 31, 2025, the Company recognized income of$3.4 million related to the change in the Put Option fair value, and during the year ended December 31, 2024, the Company recognized of expense of $2.3 million dollars related to the change in the Put Option fair value, which is recorded in other (income)/expense, net in the Consolidated Statements of Comprehensive Loss. Refer to Note 17 -Fair Value of Financial Instruments for information related to the Put Option fair value.

The shares of Series A Preferred Stock will be redeemed in cash at a price equal to $1,050 per share (105% of the Initial Issue Price) regardless of whether they are called by the Company, put back to the Company by the holders, or redeemed on September 13, 2027. The Series A Preferred Stock is liability classified and presented within noncurrent liabilities, as preferred stock liability, and the Put Option liability is recorded within other noncurrent liabilities on the Consolidated Balance Sheets.

On September 17, 2024, the holders of all of the shares of Series A Preferred Stock entered into waivers to irrevocably and unconditionally waive (and consent to such waivers for purposes of Section 12 of the Series A Certificate of Designations) the rights of the holders of shares of Series A Preferred Stock, (i) pursuant to the Series A Certificate of Designations, (a) to elect to receive shares of the Company's Common Stock or pre-funded warrants to purchase the Company's Common Stock in connection with redemption events under the Series A Certificate of Designations, (b) to elect to receive additional shares of Series A Preferred Stock on return payment dates, and (c) to receive return payments on the first three quarterly return payment dates within each one-year period followingthe issue date and to instead receive such return payments on the fourth quarterly return payment date within each one-year period following the issue date, such that each holder of Series A Preferred Stock shall receive return payments for the entire one-year period preceding each such fourth quarterly return payment date, and (ii) pursuant to the Series A Subscription Agreements, to require the Company to register the shares of Common Stock issuable upon redemption of the Series A Preferred Stock on a registration statement filed by the Company.

Preferred Stock

As of December 31, 2025 and 2024, the Company is authorized to issue 25.0 million shares of preferred stock with a par value of $0.001, of which 0.4 million shares and 0.1 million shares were issued and outstanding, respectively.

Common Stock

Holders of the Company's Common Stock are entitled toone vote for each share held of record on all matters submitted to a vote of stockholders. The holders do not have cumulative voting rights in the election of directors. Upon the Company’s liquidation, dissolution or winding up and after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any, the holders of the Company’s Common Stock will be entitled to receive pro rata the Company’s remaining assets available for distribution. Holders of the Company’s Common Stock do not have preemptive, subscription, redemption or conversion rights. All shares of the Company’s Common Stock are fully paid and non-assessable. The Company is authorized to issue 450.0 million shares of Common Stock with a par value of $0.001. As of December 31, 2025 and 2024,180.3 million and 173.6 million shares were issued and outstanding, respectively.

On February 5, 2025, the Company entered into subscription agreements (the "Subscription Agreements") with certain investors (the “Investors”), including affiliates of Sylebra, Pleiad Asia Master Fund, Pleiad Asia Equity Master Fund and affiliates of Samlyn, pursuant to which the Company agreed to sell to the Investors, in a private placement an aggregate of 4,091,293 shares of the Common Stock at a price of $8.0655 per share. Included in the Subscription Agreement were 524,349 shares of the Company's Common Stock sold to affiliates of Sylebra and Samlyn, both of whom are related parties due to their greater than 5% ownership interest in the Company, for approximately $4.2 million in proceeds before deducting fees and other estimated offering expenses. The transactions contemplated by the Subscription Agreements closed on February 6, 2025. The gross proceeds to the Company from the offering were approximately $33.0 million before deducting fees and other estimated offering expenses. As part of the Subscription Agreements, the Company filed a registration statement on March 4, 2025 registering the Common Stock sold in the offering on an existing shelf registration statement dated January 31, 2025.

NOTE 15 - EQUITY-BASED COMPENSATION

2021 Equity Incentive Plan

On March 17, 2021, the Company's stockholders approved the PureCycle Technologies, Inc. 2021 Equity and Incentive Compensation Plan (the “Plan”).

The Plan provides for the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”), performance shares, performance units ("PSUs"), dividend equivalents, and certain other awards. In general, the amount of shares issuable under the Plan will be automatically increased on the first day of each fiscal year, beginning in 2022 and ending in 2031, by an amount equal to the lesser of (a)3% of the shares of the Company’s Common Stock outstanding on the last day of the immediately preceding fiscal year, or, (b) such smaller number of shares as determined by the Board.

As of December 31, 2025, approximately 27.2 million shares of Common Stock were authorized for issuance under the Plan, of which approximately 18.3 million shares remain available for issuance under the Plan

(assuming maximum performance with respect to the applicable performance goals related to the Plan awards issued).

Restricted Stock Agreements

RSUs issued pursuant to the Plan are time-based and vest over the period defined in each individual grant agreement or upon a change of control event as defined in the Plan. The Company recognizes compensation expense for the awards equal to the fair value on the date of grant of the awards on a straight-line basis over the vesting period of such awards. The grant-date fair value of the awards is equal to the closing price of the Company’s Common Stock one day prior to the date of grant. The Company has the option to repurchase all vested shares upon a stockholder’s termination of employment or service with the Company.

A summary of RSU activity for the years ended December 31, 2025 and 2024 is as follows:

On December 31, 2024, the Company entered into an agreement with the Company's former Chief Financial Officer, whereby his restricted stock award set to expire on December 31, 2024 was extended an additional two years to December 31, 2026 in exchange forfour quarterly payments of $0.2 million, beginning on December 31, 2024. The Company received$0.5 million and$0.2 million during the years ended December 31, 2025 and 2024, respectively, which has been recognized in additional paid-in capital within the Consolidated Balance Sheets.

On June 16, 2025, the Company and the Company's Chief Executive Officer entered into an employment agreement, pursuant to which he was entitled to receive a restricted stock award of 0.2 million shares of the Company's Common Stock that immediately vested. The total compensation cost associated with this award was $2.3 million and is recorded in selling, general and administrative expenses within the Consolidated Statements of Comprehensive Loss for the year ended December 31, 2025.

As of December 31, 2025, there were$14.0 million in compensation costs related to non-vested awards to be recognized over a weighted average remaining period of 2.4 years.

Stock Options

The stock options issued pursuant to the Plan are time-based and vest over the period defined in each individual grant agreement or upon a change of control event as defined in the Plan.

The Company recognizes compensation expense for the stock option awards based on the fair value at the date of grant on a straight-line basis over the vesting period of such awards. The fair value of the stock option award is calculated on the date of grant using the Black-Scholes option-pricing model based on the following assumptions:

The expected term of the shares granted is estimated using the simplified method, which is based on the midpoint between the vesting date and the expiration of the contractual term. The simplified method is used due to the lack of sufficient historical experience for the Company. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. The expected volatility is based on the Company’s capital structure and volatility of similar entities referred to as guideline companies. In determining similar entities, the Company considered industry, stage of life cycle, size and financial leverage. The dividend yield on the Company’s shares is assumed to bezero as the Company has not historically paid dividends on its Common Stock. The fair value of the underlying Company's Common Stock is determined using the closing stock price of the Company's Common Stock on the grant date.

A summary of stock option activity for the years ended December 31, 2025 and 2024 is as follows:

As of December 31, 2025, there were$1.9 million in compensation costs related to non-vested awards to be recognized over a weighted average remaining period of 1.8 years. As of December 31, 2025, the exercisable stock options were out-of-the-money and have a remaining contractual life of 1.0 year.

Performance-Based Restricted Stock Awards

The shares issued pursuant to the Performance-Based Restricted Stock Agreements vest depending on if the performance obligations are met. In general, the PSUs will be earned based on achievement of pre-established financial and/or operational performance objectives and will vest on the date the attainment of such performance objectives as determined by the Compensation Committee of the Board, subject to the participant’s continued employment with the Company. These grants allow for the right to receive a variable number of shares, between 0% and 200% of target.

The Company recognizes compensation expense for the PSUs equal to the grant-date fair value of the equity-based compensation awards on a straight-line basis over the vesting period of such awards as the Company has concluded the performance condition is probable to be met. The fair value of the awards is equal to the fair value of the Company’s Common Stock one day prior to the date of grant.

A summary of the PSU activity for the years ended December 31, 2025 and 2024 is as follows:

As of December 31, 2025, there were$1.7 million in compensation costs related to non-vested awards to be recognized over a weighted average remaining period of 1.8 years. During 2025, certain PSUs did not achieve their performance targets, resulting in a reversal of $0.6 million in cumulative compensation expense for those awards.

Equity-based compensation expense was comprised of the following for the years ended December 31, 2025, 2024 and 2023, and is recorded in cost of operations and selling, general and administrative expenses within the Consolidated Statements of Comprehensive Loss:

NOTE 16 - WARRANTS

The Company had the following series of warrants outstanding (in thousands, except per-share values) as of December 31, 2025, and 2024, all of which are exercisable:

(1)During February 2026, the Company entered into amended warrant agreements, which, in part, extended the expiration dates related to the Public and Private Warrants and the Series A Warrants as described in Note 19 -Subsequent Events.

RTI Warrants

On January 16, 2025, RTI exercised their outstanding warrants. The Company received$5.4 million incash and issued 1.5 million shares of Common Stock to RTI.

Public Warrants and Private Warrants

The Company has outstanding public and private warrants that entitle each holder to exercise its warrants for a whole number of shares of the Company's Common Stock at a price of $11.50 per share. The warrants expire March 17, 2026, or earlier upon redemption or liquidation. The private warrants are identical to the public warrants, except that the private warrants are non-redeemable so long as they are held by the initial holder or any of its permitted transferees. If the private warrants are held by someone other than the initial holder or its permitted transferees, the private warrants will be redeemable by the Company and exercisable by such holders on the same basis as the public warrants.

The Company may redeem the outstanding warrants in whole, but not in part, at a price of $0.01 per warrant upon a minimum of 30 days’ prior written notice of redemption, if and only if the last sale price of the Company’s Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30-day trading period ending three business days before the Company sends the notice of redemption to the warrant holders. If the Company calls the warrants for redemption, management will have the option to require all holders that wish to exercise the warrants to do so on a cashless basis. In no event will the Company be required to net cash settle the warrant exercise.

The public warrants are accounted for as equity-classified warrants as they were determined to be indexed to the Company’s stock and meet the requirements for equity classification. The private warrants are accounted for as liability-classified as there is a provision within the warrant agreement that allows for private warrants to be exercised via a cashless exercise while held by the holder and affiliates of the original holder, but would not be exercisable at any time on a cashless basis if transferred and held by another investor. Therefore, the Company classifies the private warrants as a liability pursuant to ASC 815, Derivatives and Hedging Activities, until the private warrants are transferred from the initial purchasers or any of their permitted transferees. As of December 31, 2025, approximately 187,000 of the private warrants have been transferred from the initial purchasers.

During the year ended December 31, 2025,5,756 public warrants were exercised by warrant holders. The Company received$0.1 million in cash and issued 5,576 shares of Common Stock.

Series A Warrants

On March 7, 2022, the Company issued approximately 17.9 million Series A warrants (the "Series A Warrants") to certain investors in connection with a private placement in 2022 topurchase shares of the Company’s Common Stock. Each whole warrant entitles the registered holder to purchaseone whole share of the Company’s Common Stock at a price of $11.50 per share any time after September 17, 2022. The warrants expire on March 17, 2026.

On April 11, 2025, the Company entered into a side letter agreement with certain holders of the Series A Warrants to forbear the Company's exercise of its redemption rights with respect to those certain holders' Series A Warrants. As a consequence of such side letter, the Company is unable to redeem the Series A Warrants forany holder of the Series A Warrants prior to the expiration of the Series A Warrants.

The agreements governing the Series A Warrants provide for a Black-Scholes value calculation in the event of certain transactions, which includes a floor on volatility utilized in the value calculation at 100% or greater. The Company has determined this provision introduces leverage to the holders of the Series A Warrants that could result in a value that would be greater than the settlement amount of a fixed-for-fixed option on the Company’s own equity shares. Therefore, the Company has classified the Series A Warrants as a liability pursuant to ASC 815, Derivatives and Hedging Activities.

On July 28, 2025, Glockner, a related party of the Company, exercised 0.1 million of their outstanding Series A Warrants. The Company received $1.2 million in cash and issued 0.1 million shares of Common Stock to Glockner.

Series B Warrants

On May 10, 2024, the Company issued Series B Warrants to Pure Plastic to purchase an aggregate of 3.1 million shares of the Company's Common Stock(the “Series B Warrant Agreement”). Each whole warrant entitles the registered holder to purchaseone whole share of the Company's Common Stock at a price of $11.50 per share. The Series B Warrants expire on December 1, 2030, but may be subject to redemption at any time after January 1, 2028, if certain Common Stock price thresholds are met.

The Series B Warrant Agreement provides for a Black-Scholes value calculation in the event of certain transactions, which includes a floor on volatility utilized in the value calculation at 100% or greater. The Company has determined this provision introduces leverage to the holders of the Series B Warrants that could result in a value that would be greater than the settlement amount of a fixed-for-fixed option on the Company’s own equity shares. Therefore, the Company classified the Series B Warrants as a liability pursuant to ASC 815, Derivatives and Hedging Activities.

Series C Warrants

On September 13, 2024, pursuant to the Series A Subscription Agreements, the Company issued Series C Warrants to purchase an aggregate of 5.0 million shares of the Company's Common Stock. Each warrant is exercisable at a price per share of the Company's Common Stock of $11.50, subject to adjustment for splits, dividends, recapitalizations and other similar events. The Series C Warrants expire on December 1, 2030, but may be subject to redemption at any time after January 1, 2029, if certain Common Stock price thresholds are met.

The Series C Warrant Agreement provides for a Black-Scholes value calculation in the event of certain transactions, which includes a floor on volatility utilized in the value calculation at 100% or greater. The Company has determined this provision introduces leverage to the holders of the Series C Warrants that could result in a value that would be greater than the settlement amount of a fixed-for-fixed option on the Company’s own equity shares. Therefore, the Company has classified the Series C Warrants as a liability pursuant to ASC 815, Derivatives and Hedging Activities.

Refer to Note 17 -Fair Value of Financial Instrumentsfor further information.

Warrant (benefit)/expense recognized during theyears ended December 31, 2025, 2024 and 2023 is presented in the following table:

NOTE 17 – FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company records cash and cash equivalents, restricted cash, accounts receivable and accounts payable at cost, which approximates fair value due to their short-term nature or stated rates. The Company records debt at cost less any discounts and issuance costs.

As of December 31, 2025 and 2024, the Company’s financial assets and liabilities measured and recorded at fair value on a recurring basis were classified within the fair value hierarchy as follows:

As of December 31, 2025 and 2024, the estimated fair value of the Company's financial instruments not remeasured at fair value on a recurring basis within the fair value hierarchy are as follows:

For the instruments classified as Level 3, significant changes in any of the significant unobservable inputs in isolation would not result in a materially different fair value estimate. The fair value of the liabilities above is derived from the trading price of the Company's publicly traded bonds on the last trading day of the fiscal year. The Company's publicly traded bonds are thinly traded and, as such, the Company has deemed the input as an unobservable input. Since each of the instruments classified as Level 3 are being valued using similar inputs, a significant change that would impact expected volatility or the market price of PCT's Common Stock could result in a material change to the total combined value of these instruments. An increase in one or both of these inputs would result in a higher assessed value for each instrument.

Measurement of the Private Warrants

The private warrants are measured at fair value on a recurring basis using a Black-Scholes model. The private warrants are classified as Level 3 and were valued using the following assumptions:

The expected term of the private warrants is determined based on the duration of time the warrants are expected to be outstanding. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of issuance. The expected volatility is based on the implied volatility calculated for the Company’s public warrants, which have similar characteristics to the private warrants. The dividend yield on the Company’s private warrants is assumed to bezero as the Company has not historically paid dividends on its Common Stock. The fair value of the underlying Company shares was determined using a Black-Scholes value calculation.

A summary of the private warrants activity from December 31, 2024 to December 31, 2025 is as follows:

Refer to Note 16 -Warrants for further information.

Measurement of the RTI Warrants

On January 16, 2025, RTI exercised its outstanding warrants. The Company received$5.4 million incash and issued 1.5 million shares of the Company's Common Stock. The Company determined the RTI Warrants were to be measured using a Level 3 fair value measurement and was remeasured using a Binomial Tree option pricing model to calculate its fair value using the following assumptions:

The expected term of the RTI Warrants was determined based on the duration of time the warrants were expected to be outstanding. The risk-free rate was based on the U.S. Treasury yield curve in effect at the time of grant. The expected volatility was calculated based on the specific volatility of the Company’s publicly-traded Common Stock. The dividend yield on the Company’s warrants was assumed to bezero as the Company has not historically paid dividends on its Common Stock. The fair value of the underlying Company shares was determined using a Binomial Tree pricing model.

A summary of the RTI Warrants activity from December 31, 2024 to December 31, 2025 is as follows:

Measurement of the Series A Warrants

The Series A Warrants meet the definition of derivative instruments and are measured at fair value on a recurring basis using the market price of the Company’s publicly traded warrants, with changes in fair value recorded in current earnings. The Company has determined the publicly traded warrants to be an appropriate proxy to value the Series A Warrants, as both warrants have similar redemption features and the same exercise price. The Series A Warrants are classified as Level 2 for both initial measurement at issuance and subsequent measurement each period.

Measurement of the Series B Warrants

The Series B Warrants meet the definition of derivative instruments and are measured at fair value on a recurring basis. The Company has determined the Series B Warrants to be a Level 3 fair value measurement and has performed initial recognition and ongoing remeasurement using a Monte Carlo simulation to calculate its fair value using the following assumptions:

The expected term of the Series B Warrants is determined based on the duration of time the warrants are expected to be outstanding. The risk-free rate is based on the U.S. Treasury yield curve in effect at the valuation date. The expected volatility is based on the implied volatility calculated for the Company’s public warrants, which have similar characteristics to the Series B Warrants. The dividend yield on the Company’s warrants is assumed to bezero as the Company has not historically paid dividends on its Common Stock. The fair value of the underlying Company shares was determined using a Monte Carlo simulation.

A summary of the Series B Warrants activity from December 31, 2024 to December 31, 2025 is as follows:

Measurement of the Series C Warrants

The Series C Warrants meet the definition of derivative instruments and are measured at fair value on a recurring basis. The Company has determined the Series C Warrants to be a Level 3 fair value measurement and has performed initial recognition and ongoing remeasurement using a Monte Carlo simulation to calculate its fair value using the following assumptions:

The expected term of the Series C Warrants granted is determined based on the duration of time the warrants are expected to be outstanding. The risk-free rate is based on the U.S. Treasury yield curve in effect at the valuation date. The expected volatility is based on the implied volatility calculated for the Company’s public warrants, which have similar characteristics to the Series B Warrants. The dividend yield on the Company’s warrants is assumed to bezero as the Company has not historically paid dividends on its Common Stock. The fair value of the underlying Company shares was determined using a Monte Carlo simulation.

A summary of the Series C Warrants activity from December 31, 2024 to December 31, 2025 is as follows:

Measurement of the Put Option Liability

The Put Option liability meets the definition of a derivative instrument and is measured at fair value on a recurring basis. The Company has determined the Put Option liability to be a Level 3 fair value measurement and has performed initial recognition and ongoing remeasurement using a Monte Carlo simulation to calculate its fair value using the following assumptions:

(1) During June 2025, the Company announced its plans to construct the Thailand Facility, which has adjusted the timeline on construction of the Augusta Facility. Because the Put Option is contingent upon the Company incurring any indebtedness that is senior to the Series A Preferred Stock and/or secured by the assets of PureCycle Augusta, LLC, this adjusted timeline has resulted in the likelihood of the Put Option being exercised as remote. Accordingly, there has beenno value ascribed to the Put Option as of December 31, 2025.

A summary of the Put Option activity from December 31, 2024 to December 31, 2025 is as follows:

In determining the appropriate levels, the Company performs a detailed analysis of the assets and liabilities that are subject to fair value measurements.

NOTE 18 – NET LOSS PER SHARE

The computation for the basic and diluted loss per share for the years ended December 31, 2025, 2024 and 2023 are as follows:

Certain outstanding Common Stock equivalents were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented as including them would have been anti-dilutive. A summary of those outstanding Common Stock equivalents is presented in the following table:

(1)In connection with the initial business combination and merger agreement as described in Note 1 -Organization, legacy PCT unitholders will be entitled to 2.0 million shares upon the Ironton Facility becoming operational, as certified by Leidos Engineering, LLC, an independent engineering firm, in accordance with criteria established in agreements in connection with construction of the plant.

NOTE 19 - SUBSEQUENT EVENTS

Amendment to Public and Private Warrants

On February 25, 2026, the Company entered into a supplemental agreement (the “PCT Warrants Supplemental Warrant Agreement”) to the original outstanding public and private warrant agreements as described in Note 16 - Warrants, which had an original expiration date of March 17, 2026, unless a date was fixed for the redemption of the public and private warrants, if earlier. Pursuant to the terms of the original public and private warrants agreements, and upon the approval of the Board, the Company entered into the PCT Warrants Supplemental Warrant Agreement in order to extend the expiration date of the PCT Warrants to the earlier of (a) 5:00 p.m. (New York City time) on June 17, 2026, or (b) the date fixed for the redemption of the PCT Warrants. Such amendments will be effective as of March 17, 2026.

Amendments to PCT Series A Warrants

In connection with the amendment of the public and private warrants described above, the Board also approved certain amendments to the terms of the Company’s outstanding Series A Warrants as described in Note 16 - Warrants, which had an original expiration date of March 17, 2026, subject to the consent of a requisite number of holders under the terms of the Series A Warrants and conditioned upon the Company’s entry into a supplemental agreement with the Series A Warrants Agent. On February 20, 2026, the Company received the written consent of the holders of a requisite number of Series A Warrants to extend the expiration date of the Series A Warrants to the earlier of (a) 5:00 p.m. (New York City time) on March 17, 2027, or (b) the date fixed for the redemption of the Series A Warrants. Additionally, pursuant to the terms of the Series A Warrants, the Company and the consenting Series A Warrant holders agreed to amend the terms of the Series A Warrants held by such consenting Series A Warrant holders, which constitutes all of the Series A Warrants, to reduce the trading price required for the Company to redeem such Series A Warrants, subject to the other terms and conditions contained in the Series A Warrants, from $18.00 to $14.38 per share of the Company’s Common Stock for any 20 trading days in a 30 trading day period. On February 25, 2026, the Company and the Warrant

Agent entered into a supplemental agreement to memorialize the foregoing amendments, which will be effective as of March 17, 2026.